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Metro Baltic Horizons

  • BY: Andrew Hore |
  • POSTED: 06/05/2014 |

Former Russian property investor Metro Baltic Horizons has settled with former directors and advisers in return for nearly 3m. 

The latest deal is with former auditor Ernst & Young, which will pay 425,000 without admitting liability.

At the end of March, Metro settled with three former directors, Mart Habakuk, James Kenny, Paul McGuinness, who are paying the company a total of 2.5m. Proceedings are continuing against other advisers.

The litigation was based on the belief of the current board that the directors and advisers had entered into a series of property and related transactions between 2007 and 2009 that cost the company 26.6m in losses. Although the amounts that have been paid so far are significant it does not seem likely that a significant percentage of these losses will be clawed back.

Even so, at the end of June 2013 Metro had an NAV of 5.95m and cash of 6.08m. The latest settlements mean that pro forma NAV is the equivalent of 7.8m. There will be some ongoing costs of the litigation and overheads for the business even though it has sold its property assets.

At 20.75p a share, up 1.5p on the day, Metro is valued at 5.44m. that is a 30% discount to the pro forma NAV, although in reality the discount is likely to be lower than that.

There is likely to be news of any potential distribution to shareholders at the AGM, which last year was in July. The annual report for 2013 has not been published yet. Metro may also consider cancelling its Aim quotation.

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